Question
In: Finance
The JLK Corporation is considering an investment that will cost RM80,000 and have a useful life...
The JLK Corporation is considering an investment that will cost
RM80,000 and
have a useful life of 4 years. During the first 2 years, the net
incremental after-tax
cash flows are RM25,000 per year and for the last two years they
are RM20,000
per year. Calculate the payback period for this investment.
Solutions
jeff jeffy answered 2 years agoRelated Solutions
A company is considering an investment that will cost $743,000 and have a useful life of...
A company is considering an investment that will cost $743,000
and have a useful life of 8 years. The cash flows from the project
are expected to be $410,000 per year in the first two years then
$142,000 per year for the last 6 years. If the appropriate discount
rate is 12.7 percent per annum, what is the NPV of this investment
(to the nearest dollar)?
Select one:
a. $394283
b. $1880283
c. $384492
d. $516026
A company is considering an investment that will cost $744,000 and have a useful life of...
A company is considering an investment that will cost $744,000
and have a useful life of 8 years. The cash flows from the project
are expected to be $512,000 per year in the first two years then
$108,000 per year for the last 6 years. If the appropriate discount
rate is 15.0 percent per annum, what is the NPV of this investment
(to the nearest dollar)?
Select one:
a. $397417
b. $1885417
c. $415178
d. $497087
Company XYZ is considering an investment of $100,000. The useful life of the project is 10...
Company XYZ is considering an investment of $100,000. The useful
life of the project is 10 years. The cut off period is three (3)
years. The board of the directors has identified two alternatives A
and B. The expected annual cash flows are as follows:
Cost of Cash Flow
Alternative A
Alternative B
Initial
Cost
($100,000)
($100,000)
Cash Flow
Year 1
35000
35000
Cash Flow
Year 2
28000
35000
Cash Flow
Year 3
32000
35000
Cash Flow
Year 4
40000...
The cost to purchase “New Tech” will be $421,000 and will have a useful life of...
The cost to purchase “New Tech” will be $421,000 and will have
a useful life of 6 years; “New Tech” will have a salvage value of
$26,000 at the end of 6 years. The cost to purchase “Standard
Classic” will be $235,000 and will also have a useful life of 6
years; “Standard Classic” will have a salvage value of $5,000 at
the end of 6 years.
Total Contribution Margin from the sale of Widgets will be
different for each...
A firm is considering investing $42,000 in equipment that is expected to have a useful life...
A firm is considering investing $42,000 in equipment that is
expected to have a useful life of four years and is expected to
reduce (save) the firm’s labor costs by $8,900 per year. The
equipment can be sold for $18,000 at the end of the period. Assume
the firm pays a 40% income tax rate on its taxable income and uses
the declining balance (200%) depreciation method. The firm’s after
tax MARR is 5% per year.
What are the after-tax...
A firm is considering the following investment project. Theproject has a 5-year useful life with...
A firm is considering the following investment project. The project has a 5-year useful life with a $125000 salvage value as shown. Straight-line depreciation will be used. Assume the income tax rate of 34%. What is the after-tax rate of return on this capital expenditure?
U3 Company is considering three long-term capital investment proposals. Each investment has a useful life of...
U3 Company is considering three long-term capital investment
proposals. Each investment has a useful life of 5 years. Relevant
data on each project are as follows.
Project Bono
Project
Edge
Project
Clayton
Capital investment
$ 164,800
$ 180,250
$ 204,000
Annual net income:
Year 1
14,420
18,540
27,810
2
14,420
17,510
23,690
3
14,420
16,480
21,630
4
14,420
12,360
13,390
5
14,420
9,270
12,360
Total
$ 72,100
$ 74,160
$ 98,880
Depreciation is computed by the straight-line method with no
salvage...
U3 Company is considering three long-term capital investment proposals. Each investment has a useful life of...
U3 Company is considering three long-term capital investment
proposals. Each investment has a useful life of 5 years. Relevant
data on each project are as follows. I got all the answers by my
computation for average rate of return Is wrong
Project
Bono
Project Edge
Project
Clayton
Capital
investment
$164,800
$180,250
$206,000
Annual net
income:
Year 1
14,420
18,540
27,810
2
14,420
17,510
23,690
3
14,420
16,480
21,630
4
14,420
12,360
13,390
5
14,420
9,270
12,360
Total
$72,100
$74,160
$98,880
Depreciation...
Henkel Company is considering three long-term capital investment proposals. Each investment has a useful life of...
Henkel Company is considering three long-term capital
investment proposals. Each investment has a useful life of 5 years.
Relevant data on each project are as follows.
Project Kilo
Project Lima
Project Oscar
Capital investment
$165,850
$176,550
$200,850
Annual net income:
Year
1
13,910
18,725
29,425
2
13,910
17,655
24,075
3
13,910
16,585
23,005
4
13,910
12,305
14,445
5
13,910
9,095
13,375
Total
$69,550
$74,365
$104,325
Depreciation is computed by the straight-line method with no
salvage value. The company’s cost...
U3 Company is considering three long-term capital investment proposals. Each investment has a useful life of...
U3 Company is considering three long-term capital investment
proposals. Each investment has a useful life of 5 years. Relevant
data on each project are as follows.
Project Bono
Project Edge
Project Clayton
Capital investment
$161,600
$176,750
$204,000
Annual net income:
Year 1
14,140
18,180
27,270
2
14,140
17,170
23,230
3
14,140
16,160
21,210
4
14,140
12,120
13,130
5
14,140
9,090
12,120
Total
$70,700
$72,720
$96,960
Depreciation is computed by the straight-line method with no
salvage value. The company’s cost of capital...
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